Investor Starboard Value has asked Olive Garden to keep a control on its breadsticks in order to boost its performance.
The investor released a nearly 300-page treatise on Thursday in which it detailed upon the loopholes of Olive Garden and its management and suggestions to the Italian restaurant chain to control its unlimited breadsticks.
Noting the official policy of the food chain to release one breadstick per customer at one time plus an extra for the table, the hedge fund said that the servers are adopting a lackadaisical approach and bringing out more than that, leading to wastage of the breadsticks.
The investor group also said that the unlimited release of breaststicks at a time also result in serving the customers with the cold one, earning a bad name for the company.
According to Starboard, it doesn’t want to push the restaurant chain for ending the unlimited breadsticks, rather it suggests a control in the manner they’re doled out.
“Darden management readily admits that after sitting just 7 minutes, the breadsticks deteriorate in quality,” Starboard said during its presentation.
The detailed document is a part of the effort of Starboard to take control of the board of Olive Garden’s parent company, Darden Restaurants Inc.
The Orlando-based eating joint came under severe criticism after it failed to fix the deteriorating figures of its sales at its flagship chain.
The sales of Olive Garden dropped 1.3 percent in the latest quarter at established locations amid low turnouts of the diners.
Starboard also criticized the “outdated” advertising strategy for Olive Garden which it said focuses too heavily on TV ads.
Starboard also raised objection against the method by which Olive Garden prepare pasts. Starboard says for preparing pasts salting the water is the first step but it is not followed by the chefs of the restaurant chain.
Talking about the popular breadsticks Olive Garden, Starboard said that the quality has declined over the period and also compared them to hot dog buns.
The company is going to hold its annual meeting on October 10 when shareholders are expected to vote on the controlship of the board of directors.
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